28-10-2024

BTI Publishes Its First Annual Report

Last month, the Bureau for Investment Screening (Bureau Toetsing Investeringen, “BTI”) published its 2023 annual report. This report provides insights into the impact of the Investment, Mergers, and Acquisitions Security Act (Wet veiligheidstoets, investeringen, fusies en overnames, also referred to as “Vifo Act”) and other relevant regulations on investment practices in the Netherlands. It offers an overview of the 2023 application of the Vifo Act, Chapter 14a of the Telecommunications Act (formerly the Undesirable Control of Telecommunications Act), and the sectoral investment assessments under the Gas Act and the Electricity Act 1998.

In 2023, the number of notifications to the BTI increased, partly due to the introduction of the Vifo Act. As of June 1, 2023, critical providers and companies active in sensitive technologies have also come under its supervision.

The BTI actively sought cooperation with the business community, delivering presentations and informal opinions to clarify the Vifo Act. Additionally, guides were published for businesses, and collaboration with the Economic Security Entrepreneurs' Desk (Ondernemersloket Economische Veiligheid) was strengthened.

Vifo Act and the BTI
The legal framework surrounding investment screening aims to manage risks to economic security in strategic sectors, such as gas, electricity, and telecommunications. Companies investing in, merging with, or acquiring businesses in these sectors must report such transactions to the Ministry of Economic Affairs and Climate Policy. With the introduction of the Vifo Act on June 1, 2023, this reporting requirement was expanded to include vital processes, companies in sensitive technology, and business campuses. This act also allowed for retroactive screening of investments during the initial months after it came into effect.

Established in 2020, the BTI carries out these investment assessments in collaboration with other ministries. It also serves as a contact point within the European cooperation mechanism for investment screening, where EU member states share information on transactions and risks.

In the near future, the framework will be further expanded. From 2024 onwards, investments in offshore wind energy will also be screened, and a legislative proposal for the defense industry is underway. Additionally, in December 2023, the BTI published guidelines on the Vifo Act to better inform companies. At European level, a proposal to replace the current FDI Screening Regulation is under consideration, which could lead to further changes in the European screening framework.

Investment Screening Statistics 2023 BTI

Notifications: In 2023, the BTI received 55 notifications for investments, mergers, and acquisitions, a significant increase compared to the 8 notifications in 2022. This rise is largely attributed to the entry into force of the Vifo Act in June 2023, which accounted for 46 of the 55 notifications. Additionally, 9 notifications were received based on sectoral laws, comparable to previous years: 3 under the Electricity Act, 1 under the Gas Act, and 5 under the Telecommunications Act.
Completed investigations: In 2023, the BTI completed 44 investigations. 34 concerned the Vifo Act, 3 the Electricity Act, 1 the Gas Act, and 6 the Telecommunications Act. In 93% of the notifications, no risks to national security were identified. One investigation resulted in the imposition of measures, one notification was withdrawn and one notification fell outside the scope of the legislation.
Processing times: In 2023, the average processing time for investigations under the Vifo Act was 40 days. For the Electricity Act, the average duration was 55 days, and for the Telecommunications Act, it was also 40 days. No average processing time is available for the Gas Act due to only one investigation having been conducted. In 2023, the BTI extended the processing time for 6 investigations under the Vifo Act. None of the sectoral investigations received extensions. It should be noted that the Vifo Act came into effect halfway through 2023, meaning that complex investigations may not have been completed by the end of the year. This could result in lower average processing times for 2023 compared to the ongoing year (2024) and subsequent years when averages will be calculated over a full calendar year.
Investor origins: Europe remained the most common origin of investors for whom decisions were made in 2023: in 40 cases, this was the origin, compared to 4 from North and South America, and none from Africa, Asia, or Oceania. It must be noted that the numbers in the annual report only include the origin of the notifying party of an investor, and not the origin of its beneficiaries or funders.
Informal Opinions: In 2023, the Bureau Toetsing Investeringen (BTI) issued 10 informal opinions, which are preliminary judgments on the application of legal provisions. Of these opinions, 8 were related to the Vifo Act, 1 to the Gas Act, and 1 to the Telecommunications Act.

When presenting the BTI's annual report to the Dutch Parliament, the Minister of Economic Affairs included a letter in which he emphasized the importance of knowledge, technology, and industrial capacities for national security, especially in a rapidly changing geopolitical climate. He announced that the government is working on a new general administrative order to add new technologies to the scope of the Vifo Act. This measure is expected to be put forward for public consultation later this year. We will update you on this.

Furthermore, we understand that the BTI expects that it will publish its next annual report early on in 2025. Once the report will have been published, we will inform you on its content.

If you have any questions about the legal investment screenings or need assistance with filling out the BTI notification form, please contact Friederike Henke, Susanna Tang, or one of the other BUREN specialists from our Corporate team. For more information on the Vifo Act, you can also visit our website, where you will find articles by Friederike and Susanna that delve deeper into the aspects of this law:

The (Dutch) Annual Report 2023 (including charts and tables): BTI Annual Report 2023